AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
Exhibit
99.1
AMENDMENT
NO. 5 TO LOAN AND SECURITY AGREEMENT
AMENDMENT
NO. 5 TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of October 31,
2006 is entered into by and among Xxxxxxx Fabrics, Inc., a Delaware corporation
(“Parent”), HF Merchandising, Inc., a Delaware corporation (“Merchandising”),
Xxxxxxx Fabrics of MI, Inc., a Delaware corporation (“Fabrics MI”),
xxxxxxxxxxxxxx.xxx, Inc., a Delaware corporation (“Xxxxxxx.xxx”), Xxxxxxx
Fabrics, LLC, a Delaware limited liability company (“Fabrics LLC”, and together
with Parent, Merchandising, Fabrics MI and Xxxxxxx.xxx, each individually a
“Borrower” and collectively, “Borrowers”), HF Enterprises, Inc., a Delaware
corporation (“Enterprises”), HF Resources, Inc., a Delaware corporation
(“Resources”, and together with Enterprises, each individually a “Guarantor” and
collectively, “Guarantors”), the financial institutions from time to time party
to the Loan Agreement (as hereinafter defined) as lenders (each individually,
a
“Lender” and collectively, “Lenders”), and Wachovia Bank, National Association,
a national banking association, as agent for Lenders (in such capacity,
“Agent”).
W I T N E S S E T H
WHEREAS,
Agent and Lenders have entered into financing arrangements with Borrowers and
Guarantors pursuant to which Agent and Lenders have made and may make loans
and
advances and provide other financial accommodations to Borrowers as set forth
in
the Loan and Security Agreement, dated June 29, 2005, as amended by Amendment
No. 1 to Loan and Security Agreement, dated as of July 26, 2005, Amendment
No. 2
to Loan and Security Agreement, dated as of December 31, 2005, Amendment No.
3
to Loan and Security Agreement, dated as of April 25, 2006, and Amendment No.
4
to Loan and Security Agreement, dated as of June 14, 2006, by and among Agent,
Lenders, Borrowers and Guarantors (as the same now exists or may hereafter
be
amended, modified, supple-mented, extended, renewed, restated or replaced,
the
“Loan Agreement”) and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, together with this Amendment (all of the foregoing, including
the Loan Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the “Financing Agreements”);
WHEREAS,
Borrowers and Guarantors have requested that Agent and Lenders make certain
amendments to the Loan Agreement, and Agent and Lenders are willing to agree
to
such amendments, subject to the terms and conditions contained herein;
and
WHEREAS,
the parties hereto desire to enter into this Amendment to evidence and
effectuate such amendments, subject to the terms and conditions and to the
extent set forth herein;
NOW
THEREFORE, in consideration of the foregoing, and the respective agreements
and
covenants contained herein, the parties hereto agree as follows:
1.
Definitions.
(a)
Amendment
to Definition of Applicable Margin.
The
proviso to the definition of Applicable Margin set forth in Section 1.7 of
the
Loan Agreement is hereby amended by (a) deleting “and” following clause
(ii) of such proviso, and (b) inserting the following prior to the period at
the
end of such proviso:
“;
and
(iv) notwithstanding the foregoing, the Applicable Margin for the period from
November 1, 2006 through and including February 28, 2007 shall be the amount
set
forth in Tier 3 above”.
(b)
Interpretation.
All
capitalized terms used herein shall have the meanings assigned thereto in the
Loan Agreement, unless otherwise defined herein.
2.
Letters
of Credit.
Section
2.2(b) of the Loan Agreement is hereby amended by adding the following sentence
at the end of the proviso to such Section:
“Notwithstanding
the foregoing, the applicable percentage for the period from November 1, 2006
through and including February 28, 2007 shall be the amount set forth in Tier
3
above.”
3.
Financial
Statements and Other Information.
(a)
Section
9.6(a)(i) of the Loan Agreement is hereby amended by deleting the reference
to
“on or prior to October 31, 2006 with respect to the fiscal quarters ended on
or
about April 30, 2006 and July 31, 2006, and within forty-five (45) days after
the end of each fiscal quarter thereafter,” and replacing it with the
following:
“on
or
prior to February 28, 2007 with respect to the fiscal quarters ended on or
about
April 29, 2006, July 29, 2006 and October 28, 2006, and within forty-five (45)
days after the end of each fiscal quarter thereafter,”.
(b)
Section
9.6(a)(ii) of the Loan Agreement is hereby amended by deleting the reference
to
“on or prior to October 31, 2006 with respect to the fiscal year ended on or
about January 31, 2006, and within ninety (90) days after the end of each
fiscal year thereafter,” and replacing it with the following:
“on
or
prior to December 31, 2006 with respect to the fiscal year ended on or about
January 31, 2006, and within ninety (90) days after the end of each fiscal
year thereafter,”.
4.
Retention
of a Consultant.
Without
limiting any other rights or remedies of Agent and Lenders under the Loan
Agreement or any of the other Financing Agreements: (a) on or before November
30, 2006, Borrowers shall engage and retain, at Borrowers’ cost and expense, a
consultant acceptable to Agent (based on a list of acceptable consultants to
be
provided by Agent to Borrowers promptly following the date hereof) to evaluate
and review each Borrower, its business, assets, operations and financial
performance and such other matters as Agent shall request and perform such
other
services as Agent shall request, and (b) Borrowers shall cause such consultant
to promptly prepare and deliver to Agent and Lenders, in form and substance
satisfactory to Agent (on a commercially reasonable basis), a written report
with respect to such evaluation and review as Agent on a commercially reasonable
basis may specify to Borrowers or such consultant.
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5.
Amendment
Fee.
In
consideration of this Amendment, Borrowers shall pay to Agent (for the account
of Lenders on a pro rata basis according to their respective Commitments) an
amendment fee in the amount of $100,000, which shall be fully earned and due
and
payable on the date hereof and which may be charged directly to the loan account
of any Borrower.
6.
Conditions
Precedent.
The
effectiveness of the terms and provisions contained herein shall be subject
to
the following conditions precedent:
(a)
Agent
shall have received this Amendment, duly authorized, executed and delivered
by
Borrowers, Guarantors and the Required Lenders; and
(b)
after
giving effect to this Amendment, no Default or Event of Default shall exist
or
have occurred and be continuing on the date hereof.
7.
Representations,
Warranties and Covenants.
In
addition to the continuing representations, warranties and covenants heretofore
or hereafter made by Borrowers and Guarantors to Agent and Lenders pursuant
to
the other Financing Agreements, Borrowers and Guarantors hereby represent,
warrant and covenant with and to Agent and Lenders as follows (which
representations, warranties and covenants are continuing and shall survive
the
execution and delivery hereof and shall be incorporated into and made a part
of
the Financing Agreements):
(a)
This
Amendment has been duly executed and delivered by Borrowers and Guarantors
and
the agreements and obligations of Borrowers and Guarantors contained herein
constitute legal, valid and binding obligations of Borrowers and Guarantors
enforceable against Borrowers and Guarantors in accordance with their respective
terms.
(b)
after
giving effect to this Amendment, no Default or Event of Default has occurred
and
is continuing as of the date hereof.
8.
Effect
of this Agreement.
Except
as modified pursuant hereto, no other changes or modifications to the Loan
Agreement or the other Financing Agreements are intended or implied, and in
all
other respects the Financing Agreements are hereby specifically ratified and
confirmed by the parties hereto as of the effective date hereof. This Amendment
represents the entire agreement and understanding concerning the subject matter
hereof between the parties hereto, and supersedes all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. To the extent of any conflict between the
terms
of this Amendment and the other Financing Agreements, the terms of this
Amendment shall control. The Loan Agreement and this Amendment shall be read
and
construed as one agreement.
9.
Governing
Law.
The
rights and obligations hereunder of each of the parties hereto shall be governed
by and interpreted and determined in accordance with the laws of the State
of
New York without regard to principals of conflicts of laws, but excluding any
rule of law that would cause the application of the law of any jurisdiction
other that the laws of the State of New York.
10.
Binding
Effect.
This
Amendment shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns.
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11.
Further
Assurances.
The
parties hereto shall execute and deliver such additional documents and take
such
additional action as may be necessary or reasonably desirable to effectuate
the
provisions and purposes of this Amendment.
12.
Counterparts.
This
Amendment may be executed in any number of counterparts, but all of such
counterparts shall together constitute but one and the same agreement. In making
proof of this Amendment, it shall not be necessary to produce or account for
more than one counterpart thereof signed by each of the parties hereto. This
Amendment may be executed and delivered by telecopier or other electronic method
of transmission with the same force and effect as if it were a manually executed
and delivered counterpart.
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IN
WITNESS WHEREOF, the parties have caused these presents to be duly executed
as
of the day and year first above written.
BORROWERS
XXXXXXX
FABRICS, INC.
By:
___________________________
Title:__________________________
HF
MERCHANDISING, INC.
By:
___________________________
Title:__________________________
XXXXXXX
FABRICS OF MI, INC.
By:
___________________________
Title:__________________________
XXXXXXXXXXXXXX.XXX,
INC.
By:
___________________________
Title:__________________________
XXXXXXX
FABRICS, LLC
By:
___________________________
Title:__________________________
GUARANTORS
HF
ENTERPRISES, INC.
By:
___________________________
Title:__________________________
HF
RESOURCES, INC.
By:
___________________________
Title:__________________________
[SIGNATURES
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[SIGNATURES
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AGENT
AND LENDERS
WACHOVIA
BANK, NATIONAL ASSOCIATION,
as
Agent
and as a Lender
By:
___________________________
Title:__________________________
THE
CIT
GROUP/BUSINESS CREDIT, INC.,
as
a
Lender
By:
___________________________
Title:__________________________
PNC
BANK,
NATIONAL ASSOCIATION,
as
a
Lender
By:
___________________________
Title:__________________________
XXXXX
FARGO RETAIL FINANCE, LLC,
as
a
Lender
By:
___________________________
Title:__________________________
